Federal Family Education Loan Program

Office of federal student aid, funding federal family education loan program

There are mainly major federal loans which are granted to the people, one of this is FFEL or Federal Family Education Loan Program which was first introduced in 1965, by the Higher education act. It is mainly funded through public and private partnerships which are both at local and national level. This Federal Family Education Loan Program is accounted for more than 80 % the federal loans. These are helping more and more Americans go to the college and have a better life. Till date more than 50 million American students have been helped by the Federal Family Education Loan Program.

The types of loans in Federal Family Education Loan Program are as follows:

Stafford
In this type of loan interest is paid by the government till student is in school. Also during grace periods the interest is paid by the government. Interest Rate for this loan is 6.8%.

Unsubsidized Stafford
This loan has same rate of interest as Stafford loan but here Interest is NOT paid by government when student is in school or during college. Also same goes for grace or deferment periods. Interest Rate for this loan is 6.8%.

PLUS
This loan allows parents to borrow for paying the fees for the higher education of their children. (Undergraduates and Graduate). Interest Rate for this loan is 8.5%. This type of loan is required to take by parents of students so they can help in repaying process.

Consolidation
This plan can be used to merge more than one federal education loan in to one single loan and student have to pay it at a lower rate of interest which is capped at max 8.25%. Many loans are merged with much lower rate of interest and also saving much of the administrative fees.

Thus these are the four components of FFEL loans or Federal Family Education Loan Program.